Question 1

If the discount rate used in a project analysis is increased

Accepted Answer

A)  net benefits will normally increase 
B)  net benefits will be made equal to net costs 
C)  net benefits will normally decrease 
D)  net benefits will be unaffected

Question 2

When it comes to determining the appropriate environmental project to select, the ________ link(s) benefit-cost analysis to our theoretical model of the economics of the environment.

Accepted Answer

A)  equimarginal principle 
B)  socially efficient scale 
C)  social discount rate 
D)  economies of scale

Question 3

As part of an environmental risk assessment, scientists and epidemiologists engage in dose-response analysis to determine the relationship between

Accepted Answer

A)  medicine and cure rates. 
B)  exposure and impacts. 
C)  pesticides and harvest. 
D)  benefits and costs.

Question 4

The 1980 Comprehensive Environmental Response, Compensation and Liability Act resulted in the US Department of Interior defining the calculation of damages to a valued resource as

Accepted Answer

A)  the lost value of the resource. 
B)  the value of restoring the resource. 
C)  the value of replacing the resource with another resource. 
D)  the lesser of the lost value of the resource or the value of restoring the resource.

Question 5

There are two primary types of public environmental programs where benefit-cost analysis is typically done:

Accepted Answer

A)  physical projects and regulatory programs. 
B)  programs initiated by the for profit sector and programs initiated by the not for profit sector. 
C)  fixed budget and fixed impact projects. 
D)  net benefit projects and sensitivity analysis projects.

Question 6

Refer to the figure above. A program that reduces emissions from the uncontrolled level of e1 to emissions level e2

Accepted Answer

A)  reveals total costs equal to area (a+b+c+d). 
B)  is clearly preferable to e*, where MD=MAC. 
C)  yields negative net benefits because the MD curve lies above the MAC curve. 
D)  reveals net benefits of (a + b) - (b).

Question 7

During the process of risk valuation, we often use the likelihood of outcomes to calculate the __________________.

Accepted Answer

A)  probability distribution 
B)  expected value 
C)  future value 
D)  valuation

Question 8

The table above represents

Accepted Answer

A)  a regressive outcome. 
B)  a progressive outcome. 
C)  horizontal equity. 
D)  vertical equity.

Question 9

_________ is a type of risk analysis that focuses on looking at different policy options and the levels of risk they may entail.

Accepted Answer

A)  Risk-benefit analysis 
B)  Comparative-risk analysis 
C)  Risk characterization 
D)  Exposure analysis

Question 10

Vertical equity treats

Accepted Answer

A)  people in the same circumstances identically. 
B)  people in the same circumstances proportionately. 
C)  people in different circumstances differently. 
D)  none of the above.

Exam 6: Framework of Analysis